Chapter 2: Why do International Alliances Fail? Some Insights from Culture and Human Social Biology

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2. Why do international alliances fail? Some insights from culture and human social biology Gert Jan Hofstede INTRODUCTION In recent decades, enterprises in many sectors have been globalizing. Pressures to innovate have intensified. When two or more partners in several countries have complementary skills or advantages, this gives rise to international collaborative ventures. Das and Teng (2000) define them as ‘inter-firm cooperative arrangements aimed at pursuing mutual strategic objectives’. These can have various configurations, for example joint ventures, research and development (R&D) alliances or supply networks. In the management literature the term used most frequently is ‘strategic alliances’; we shall say ‘alliances’ for short. These have in common that they are voluntary, long-term collaborative efforts by a number of independent organizations. Such an effort requires investing in mutual relationships, and crucially, dividing risks, rewards, property rights and decision rights, in order to function. The number of international alliances is sharply on the rise. De Man and Duysters (2007) present data from 200 global companies across sectors and countries showing a rise from 200 to 2750 in the period 1996–2006. Alliances frequently fail though; average success rates are around 50 per cent. About 10 per cent of companies succeed in almost all their alliances, while another 10 per cent fail in almost all their alliances. Among NonChinese companies that ally with Chinese companies, this distribution is different: 30 per cent fail in almost all their alliances, while 25 per cent are almost always successful in their alliances. This distribution...

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